As Bitcoin inches closer to the long-term support level of $25,000, uncertainty looms around whether the price will hold steady or experience further decline. Traders and investors remain glued to market dynamics to predict the next move for this leading cryptocurrency. With Bitcoin navigating this crucial support level, its future trajectory hangs in the balance. Market sentiment is influenced by a variety of factors that need to be explored.
Increased regulatory uncertainty in the United States has been affecting Bitcoin as Marathon Digital, a prominent mining company, recently received a subpoena from the SEC. The investigation’s objective is to uncover possible violation of federal securities laws through related-party transactions conducted by Marathon Digital. Moreover, concerns around the Grayscale GBTC Trust Fund, holding a considerable amount of Bitcoins and trading at a significant discount for over a year, fuel skepticism. Challenges faced by the parent company, Digital Currency Group (DCG), with failing subsidiaries, such as the bankruptcy-protected Genesis Capital, also impact Bitcoin’s price.
During these developments, Bitcoin underwent a 7.2% correction as the US dollar displayed strength, as evidenced by the dollar strength index (DXY). An inverse correlation between the DXY index and Bitcoin indicates that a stronger dollar could affect the demand for alternative store-of-value assets. Examining derivatives metrics and professional traders’ positioning will provide more clarity on the market.
With a current price of $26,454 and a 24-hour trading volume of $18.4 billion, Bitcoin has experienced a 2.75% decrease in value. CoinMarketCap ranks it first with a live market capitalization of $512 billion. It has a circulating supply of 19,371,200 BTC coins and a capped maximum supply of 21,000,000 BTC coins.
On the technical front, Bitcoin found support around $26,300, pausing its downward trend. The breach of the $26,800 support level in the four-hourly timeframe recently makes it a potential resistance level for Bitcoin. Key technical indicators, such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), indicate an oversold zone, suggesting that if Bitcoin stays above $26,000, there’s a good chance of a bullish rebound toward $27,800 or $27,500. However, the 50-day Exponential Moving Average (EMA) also introduces significant resistance around $27,500, hinting at the bearish bias remaining.
To summarize, keep an eye on $26,000 as a critical pivot point. If Bitcoin holds above this level, it may test the next resistance levels at $27,500 or $28,400. Should the downward trend persist, the next support level is likely to be around the 50% Fibonacci retracement level of $25,300.
Source: Cryptonews
